‘Improving’ the Norquist Taxpayer Protection Pledge

You know that truck-sized gap in Grover Norquist’s Taxpayer Protection Pledge that I was talking about? The one where lawmakers who are hamstrung by this pledge just go ahead and spend the money anyway? A couple of libertarian/conservative activists have noticed this, and they’ve set about closing the gap.

The pledge commits lawmakers to: 1.) Vote against any budget that isn’t balanced or any bill that increases net spending; 2.) Be willing to cut expenditures for all government programs, and 3.) Reject any increase in the government’s borrowing capacity. Only congressional authorizations for military force are exempt from the pledge.

Boak’s piece continues:

The mechanism of [Norquist’s] pledge impresses Bydlak, but he recognizes that there were negative side effects from simply blocking higher taxes: The government turned more toward borrowing, rather than bringing down spending.

Federal outlays totaled about $1 trillion after Norquist founded his group in 1986, according to the White House Office of Management and Budget. Spending this year topped $3.7 trillion, almost double what it should have been if the federal budget tracked inflation. The annual debts during that time are just shy of $9 trillion, as deficits replaced tax hikes.

“You’ve had this unintended consequence where you allowed high spending to occur,” Bydlak said. “If there is still a feeding tube being stuffed down the beast’s throat, you’re not really starving the beast. That feeding tube is borrowing and the issue of new bonds.”

For the record, I think a statutorily required balanced budget is a stupididea, and that anyone who signs this new pledge is terrifically insane and should therefore be disqualified from public office.

Other than that, it’s a significant improvement on Norquist’s porous pledge.

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9 Responses to ‘Improving’ the Norquist Taxpayer Protection Pledge

The backdoor work around of debt funding to circumvent Norquist’s grandstanding “pledge” was so obvious, it was as immediately laughable and pathetic as Norquist himself. Only the MSM didn’t get it because they are role-players in the sclerotic Beltway Kabuki so amplified the vacuous “controversial” challenge into into an illusory “something.

BTW, old Grover pockets $300,000 a year to engage in his Beltway pseudo-Tea Party Minstrel Show where he merely has to command Republican Congresspeople to dance to his meaningless tune to collect.

Norquist is as much of a reptilian political hack as the rest of them. It’s all an act…

I agree that the proposed balanced budget amendments have been poorly-drafted, impractical, and unenforceable.

I still think that there could be a workable, enforceable manner to amend the Constution to make chronically unbalanced budgets more difficult, if not exactly prohibited.

The practical vehicle through which our government runs up debt is the sale of Treasury bonds. An amendment could be enacted barring the sale of Treasury bonds without an explicit Congressional authorization with a supermajority — let’s say two-thirds — threshold, and that such a vote could be good for a set period — let’s say two years — so that the Treasury would not have to come to Congress every time the former needed quick cash. In my proposal, each Congress (lasting two years, that is) would get a high-threshold vote on whether to have the option of running a deficit; the two-thirds requirement would necessitate broad public support for living beyond our current means, which would (one hopes) limit such deficit spending to times of widely-agreed national emergency. Treasury bonds sold outside a time window authorized by a two-thirds Congressional vote would be null and void, a provision that courts could certainly enforce.

In the proposal sketched above, nobody has to wonder how to define “revenue” or “expenditure,” nor does it matter whether or not the Republic is at war, nor would courts make decisions about taxes and spending, nor would the courts be flooded with lawsuits from taxpayers and activist groups claiming an unconstitutional budget. It simply makes it more difficult (though hardly impossible) for Congress to whip out the national credit card, T-bills, which are concrete, tangible instruments not subject to legal wrangling over definitions.

The fatal flaw of Starve The Beast was that the US government has an enormous (though apparently not infinite) capacity for credit, as the dollar is the world’s reserve currency, and the US economy is the world’s largest (meaning that we can be counted to make interest payments on the debt — bonds — that we sell). An amendment putting the brakes on Treasury bonds would correct that.

I was going to support this, then I read your referenced materials and…blah, you have a point.

A question: what was the issue behind PAYGO.. well, one that doesn’t have a ton of ‘exceptions’ (unless someone can tell me why those are needed)? Why not just rely on that to stop further spending then just, like mature individuals manually lower…Ok STOP that laughing, congress HAS been mature before…anyway, manually lower the spending.

Why rely on some ‘oh so easy’ set of rules that can easily tie your hands down in some unexpected way (like not being able to set for Inflation, as the new pledge may end up doing)?

Refusing to raise the debt ceiling is the equivalent of a law requiring Congress to balance the budget of the revenues it raises and the expenditures it authorizes, and it requires no amendment of the Constitution.

Warren Buffett endorses an amendment that would require that the Federal Debt not exceed a certain percentage of GNP, which would also constrain the Budget in a way comparable to a Balanced Budget Amendment. What is your thought on that?

I see your aim there. If your teenager is running up credit cards, then take away the cards.

Now, this is where my knowledge how government debt is picked up falls apart, but aren’t Treasury bills just one of the many ways that the government can spend without proper revenue? Unless every single method to rack up debt, including creative methods that don’t seem obvious now, is blocked, we’re just adding more regulation for no purpose.

Thus, it’s easier just to set the bill to anything that’s not paid by revenue, rather than attempting to cut individual CCs.

Which gets to the other issue that scott mentioned: enforcement. You said ‘enforceable by the courts’, but how ? If congress decides to be wrong and sells me $5000 worth of T-bills, then later the court says no…what happens? Am I forced to pay back the money? Is every congressperson required to go to the supreme court for spankies? What’s the actual method to punish or reverse the crime?

Without that, you’ve set a rule that congress can easily break. That not only destroys the rule but then helps encourage the idea of creating rules congress can put in that the public likes but they don’t have to follow.

(sidenote; this is a reason why I’d rather jump the cliff than just delay sequestration until another time. Once a can gets kicks it keeps getting kicked)

Bonds carry legal requirements, requirements which, like any contract provision, can be enforced by a court when a party to a legal agreement does not uphold his obligations.

The seller of a bond (the one going into debt, that is) is required to make interest payments according the the terms of the bond (rate, frequency of payment, total life of the bond, compounding), and to redeem the bond in full upon maturity. If the seller defaults on either interest or redemption, the bondholders (creditors) can take the seller to court. On top of this, bonds are also tradeable instruments, meaning that the obligations owed to the original buyer pass to a new buyer once the bond is traded on the open market.

Were you to buy “unconstitutional” (invalid) bonds under my proposal, and Congress defaulted on either an interest payment or redemption upon maturity (which it very well might, were it not under legal obligation), you would have no legal recourse to force Congress to pay up. Your bonds would be worthless on the open market, because no one would trust that he would get his money back by trading with you.

I am no financial or legal expert, so I would not be surprised if there is some weakness in my idea that I am overlooking. I was just trying to think of a creative way to give incentive to fiscal discipline, and strong disincentive to indiscipline, that could be enforced practically, just as other restraints on Congressional and executive power (e.g. the Bill of Rights) are enforceable in the courts.